Rice economist authors first-of-its-kind political economy textbook

After more than 20 years of teaching and research on the subject, Rice economist Antonio Merlo has authored an innovative political economy textbook for undergraduates.

Political Economy and Policy Analysis (Routledge, 222 pages, $49.95) offers readers an opportunity to gain a more sophisticated understanding of political and economic processes and the relationship between them.

“When Adam Smith wrote ‘The Wealth of Nations’ — which denotes the birth of economics — economics was actually political economy, because there was no notion that you could understand what goes on in an economy without simultaneously looking at what happens in the political arena,” said Merlo, the George A. Peterkin Professor in Economics and dean of Rice’s School of Social Sciences.

However, Merlo said the scholars who developed the formal underpinning of economics shipped the political stuff “off to another plane,” and for quite some time most of the economics discipline seemed to “take politics for granted.”

“Through some often questionable assumptions, most of economics seeks to explain away political structures by characterizing them as stable and predictable or as inconsequential in understanding what goes on in an economy,” Merlo said. “Such attempts are unwise, and this book shows how governments and political institutions are composed of people who respond to incentives and whose behavior and choices can be studied through the lens of economics.”

The book opens with a refresher on microeconomics and an introduction to political economy before showing how a political-economic equilibrium can be achieved. The text explores how to separate the external parts of an economic model that cannot change from the internal parts that can be affected. In addition, it demonstrates that economic and political issues alike can be studied within the same general framework.

Merlo’s ultimate goal for the textbook is to bridge the gap between economics and politics, giving readers a deeper appreciation for social scientific thinking.

“The decisions we make every day and politics very much affect the economy,” he said. “We cannot act like they are not intertwined.”

More information on the book is available online at https://www.routledge.com/Political-Economy-and-Policy-Analysis/Merlo/p/book/9781138591783.